Question

eBook

Find the future values of these ordinary annuities. Compounding occurs once a year. Do not round intermediate calculations. Round your answers to the nearest cent.

1. $600 per year for 14 years at 16%.

   $  

2. $300 per year for 7 years at 8%.

   $  

3. $200 per year for 7 years at 0%.

   $  

4. Rework parts a, b, and c assuming they are annuities due.

   Future value of $600 per year for 14 years at 16%: $  

   Future value of $300 per year for 7 years at 8%: $  

   Future value of $200 per year for 7 years at 0%: $  

Answer 1

Answer a)

Future Value Annuity =

r = 0.16

n = 14

=

= 26203.1924526

Answer b)

Future Value Annuity =

r = 0.08

n = 7

=

= 2676.84100788

Answer c)

Future Value Annuity = 200 * 7 = 1400

Answer d)

1st part

Future Value Annuity =

r = 0.16

n = 14

=

= 30395.70

2nd Part

Future Value Annuity =

r = 0.08

n = 7

=

= 2890.99

3rd part

Future Value Annuity = 200 * 7 = 1400